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This guidance note provides information about historic rates of interest on overpaid VAT.

For information about repayment interest on VAT credits or overpayments for VAT return periods starting after 31 December 2022, see the Interest ― repayment interest on VAT credits or overpayments guidance note.

For detailed commentary on repayment interest for VAT return periods starting after 31 December 2022, see De Voil Indirect Tax Service V5.196A.

For detailed commentary on repayment interest for VAT return periods starting before 1 January 2023, see De Voil Indirect Tax Service V5.196.

In a case that concerned the method of calculating interest on overpaid VAT, the Supreme Court decided that HMRC can calculate interest on a simple basis and is not required to calculate interest on a compound basis.